Hi
I'm looking to buy a car from a main dealer. The salesman has offered to pass on the finance commision £1500. He says after I have made one payment I can phone up for a settlement fee and cancel the finance deal allowing me to take out a cheaper personal loan. The £1500 would be knocked of the price of the car.
Is this legal?
Will I be getting myself into a sticky mess or is it a good way to save cash on the deal?
Thanls for any advice
Edited by Davey Boy on 14/03/2008 at 09:50
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Commission on finance deals is generally subject to a clawback if the deal is cancelled for nay reason within a specified time. Cancelling it within a month or so would probably clawback 100% of the commission, so I can't see how he can offer to give you something that won't be his for very long.
Ask to speak to his boss to confirm?
Is the salesman from Nigeria, and does he have an uncle who sadly passed away with $100,000,000 in the bank?
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2 questions.....
Does the salesman plan to leave the employment of this dealer, sometime after you conclude the purchase, but before you cancel the agreement. He would then be leaving the dealer to pick up the clawback, but still achieving his sales target / commission.
Has he pointed out what the early settlement penalty is for the borrower? This could be very high, and buried in the small print.
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I couldn't get my head around how this money would be knocked off the car "up front". This semmed to put me in a good position.
It seemed too good to be true. It also seemed very dodgy and underhand.
If these are the sort of tricks the salesman gets upto I wonder what goes goes on behind the scenes!!
I think I will give this dealer a miss!
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Perhaps there's a misunderstanding of the terminolgy used or the workings of the scheme, but I was certainly offered a deal like the OP's when looking at a Toyota Yaris a year or so ago.
There was a discount of the best part of £2K if we took Toyota finance and I was assured (by a dealer and by a broker) that there would be absolutely no problem settling in full after a month - indeed it's the law that the maximum penalty for early settlement is 2mths interest (note interest, not payments) so the penalty is piffling.
The dealer told me they rely on people not actually getting around to changing the finance once they've got the car and just letting the original deal run.
In the event we bought a Colt for cash so never tested the above deal.
Edited by Bill Payer on 14/03/2008 at 11:56
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I had something similar when I bought this very laptop from a major retailer.
The salesman said he'd knock some money off if I took the after care extra warranty which I was told I could cancel after one payment, leaving me a few quid in pocket.
I couldn't be bothered and bought the computer anyway.
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Mrs V was offered a similar 'deal' on her Mx5 - we paid on plastic to get the points instead - as it was an opportunity to get the customer a contribution towards the deposit met, without appearing to discount the vehicle.
Don't forget, the dealer WILL still be getting the profit margin, on the sale, as well as his bonus, on units sold, so he's not loosing out!
& if he's implying that you'd get a better finance rate shopping for your own funding, he probably realises that the money source he uses, isn't good value anyway & plenty of customers don't take it anyway!!
VB
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I was certainly offered a deal like the OP's when looking at a Toyota Yaris a year or so ago.
When i worked for toyota they frequently had similar offers on a number cars in the range where if you took toyota's finance you got usually between £500 and £1000 deposit contribution. If you were to pay the finance off pretty much straight away you were quids in.
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